The past years have seen an emergence of renewable electricity generation which caused a shift to short-term and intraday trading. Traders use the intraday market to optimize their position to reduce risks associated with unexpected imbalance prices charged by the TSOs, while others see the Intraday Market as an important tool for their portfolio management. Renewable generation is less predictable, introducing volatility, where positions may change rapidly and decisions are based on multiple information sources. To manage exposures and capitalize on opportunities, it requires a live, real-time system with automated market connections to the SPOT markets; Intraday Markets: Real Money in near Real Time!
Most market participants will not have missed the activities around upcoming changes on the regulatory and accounting side. While most are aware, are most also ready? Time is running out with the first change as soon as November 1, and significant other changes effective by January 2018. Revisions to EMIR will be up first. For those in energy and commodity trading, MIFID II Regulatory Technical Change 20 and 21 are important. MIFID II will also activate a few parts of MAR. Finally, IFRS standard 9, which industry watchers expect most companies to fully adopt, has amandatory effective date for annual periods beginning on or after 1 January 2018.
Companies undertaking implementation of C/ETRM systems seek to reduce the risk of delays and exceeding budget. Actively collaborating creates a foundation for finding effective solutions and an environment where both vendor and customer have skin in the game and failure is not an option. To accommodate this process, following an iterative implementation methodology such as an Agile process is imperative. This approach provides flexibility and adaptability to changes that invariably arise during the process and is designed to deliver small “wins” that demonstrate success, project momentum and therefore a positive customer experience.
As always when we enter a new year, business and technology trends are announced of what is expected to be next, that will shape the industry, and the industry may need to get ready for. What is in the cards on the technology side ranges from digital transformation, artificial intelligence, virtual reality, and 3D printing and much more. This is further influenced by world and/or market affairs that may impact the business and prompt change. While not all applicable to the commodity trading and risk management industry, let’s consider: TRENDS in 2017 that also apply to C/ETRM Continue reading
Wholesale energy markets have never been easy and when global deregulation started over 20 years ago, energy trading became more complex giving rise to information technology solutions to address the risks with energy trading: Energy Trading and Risk Management (ETRM) systems.
It was essentially the first message that the use of ETRM systems was the prudent way to help market participants manage complex risk scenarios and effectively trade and manage energy transactions from trade capture to delivery and settlement. Following several years of economic hardship due to the 2008 global financial crises, market participants now face an environment of ever-emerging rules, the effects of renewable energy and competitive pressures.
It is with an effective ETRM system that market participants can respond to three main challenges: Increasing complexity and workload, contain operating cost, and regulatory requirements.
As C/ETRM systems advance, delivering the latest technical innovations supporting commodity trading, the successful software vendor will practice what Steve Jobs so famously said: “You’ve got to start with the customer experience and work back toward the technology – not the other way around.”
With C/ETRM systems being such a substantial investment, customers can ill afford failure. Realizing their C/ETRM vision for increased efficiency, cost-effectiveness and happy productive employees, calls for a comprehensive engagement approach that ensures success and delivers a superior customer experience. Prospective customers therefore will be interested to learn from C/ETRM vendors: Is your C/ETRM solution Not Just Capturing Deals, but also the Customer?
Progress always involves risk: you can’t steal second base and keep your foot on first. Decision-makers not willing to get out of their comfort zone will choose a solution based on the old adage “you can’t go wrong with IBM.”
A misguided attempt to secure their jobs. Decision-makers interested in real progress and getting ahead are what management consultant Geoffrey Moore calls “early adopters” and “pragmatists in pain.” They go with disruptors who have a better mousetrap to solve problems that can’t be solved with established products.
Market demand for renewable energy continues to grow due to governmental programs, increasing corporate initiatives as well as households voluntarily choosing to purchase ‘green’ energy. Consequently, the volumes of Renewable Energy Certificates (RECs) guaranteeing that the electricity was produced from a renewable energy resource are swelling.
Apart from the management challenge of tracking RECs and monitoring exposure, those types of certificates that are tradable carry a value and must be settled and reported. This calls for automation of the end-to-end process, from generation to expiration or retirement. Pioneer’s RECTracker provides a robust solution from inventory planning to accounting. Time to ‘renew’ your RECs/GOs management system?
REMIT reporting of trades executed on Organised Market Places (OMP) started on October 7, 2015. All other trades, i.e. bilateral trades, need to be reported from April 7, 2016. While the October deadline was largely covered by the OMPs, or other services to carry out the reporting on behalf of the market participant, the April deadline is more complex and requires implementation of the right system solution to meet this challenge best. Pioneer Solutions’ REMIT module is ready to support your Standard- and Non-Standard Contract reporting as well as Electricity and Gas Transportation Contracts. Are you ready for April 7?
EMART 2015 welcomed a 700+ audience to Barcelona, from mainly Europe’s Utilities and Trading companies, keen to learn about the future of the European energy market. Among them was Pioneer Solutions ready to share how its next generation energy trading and risk management (ETRM) system supports the pioneering views of the expert speakers.
The overarching theme was how trading firms will move forward and which trading business models will prosper. New visions were presented in a series of sessions across power and gas trading, and energy market supervision, including the role of renewables, generation capacity mechanisms, short-term trading markets, reporting obligations, volatility of gas prices as well as go-to-market and product ideas. Continue reading